What is Augmented Reality and How Can Businesses Benefit?

Augmented reality sounds like a term fit for science fiction, but it’s increasingly becoming a very frequent part of daily life. For a whole generation of younger people, “augmented reality” will forever align with Pokémon Go, currently the #1 mobile app in the world. Users of the app catch Pokémon as their avatar traverses across a real world map, guided by the player’s actual movements.

The app features an “augmented reality mode,” which uses a mobile device’s camera and gyroscope to display a Pokémon, but with a backdrop reflecting the real world where you’re standing. For many people, this is their first taste of augmented reality in action.

Considering that Pokémon Go has emerged as the most popular mobile game in U.S. history, it’s fair to wonder what’s next for the augmented reality topic. Specifically, it opens up a variety of business opportunities, ranging from location-based rewards to more effective personalization.

It’s interesting yet fitting that a Pokémon game is introducing millions to the power of augmented reality. It’s essentially easing them into a technology that throughout the next few decades will likely be a very common source of marketing for businesses.

The History of Augmented Reality

The word “augmented reality” is said to come from L. Frank Baum’s 1901 novel The Master Key: An Electrical Fairy Tale, describing a set of glasses that could provide an instant view of one’s character.

While Pokémon Go is the first augmented reality game of massive popularity, the past decade saw several uses of augmented reality that can potentially provide a glimpse of future ideas as well. The Navy was already working as early as 1999 on a Battlefield Augmented Reality System (BARS), while several years later car manufacturers were using augmented reality to provide service information for technicians, like Volkswagen’s MARTA (Mobile Augmented Reality Technical Assistance) app.

Still, it wasn’t until 2014 that augmented reality reached beyond very niche applications to the general public. While it was far from being a commercial success, Google Glass was a highly talked-about product that showed a glimpse into future wearable augmented reality. Other companies like Epson have followed suit with “smart glasses,” which display details like time and incoming calls in the glasses’ visual interface. People loved the creativity of the product, but a lack of features and accessibility made the device vanish quickly in the eyes of consumers.

Pokémon Go, on the other hand, brilliantly coincided augmented reality concepts with an accessible, fun and nostalgic franchise to inspire real-world movement and activity. This is a facet of augmented reality that can have massive benefits for businesses seeking relevant opportunities in the field.

Retail Foot Traffic and Augmented Reality

Retail businesses cherish any form of effective marketing that can get potential consumers on their feet and into their stores. After all, the more foot traffic a retail store has, the more sales they’re likely to make. Many retailers have already reported significant increases in their foot traffic because of Pokémon Go. The stunning thing is that Pokémon Go isn’t even designed with these retailers in mind, yet they’re still benefitting immensely from it. It prompts the thought: If Pokémon Go is this powerful in terms of generating foot traffic, imagine the effectiveness of an augmented reality app that’s actually built for the business specifically!

The Power of Statuses and Virtual Points

While not augmented reality specifically, the appeal of Foursquare mayorships is a testament to the power of statuses and virtual points in the virtual sphere. On Foursquare, users physically arrive at a location and check in. If they accumulate the most check ins to that location, they become “mayor” of that location.

Now, this mayoral position doesn’t have any pay and doesn’t provide any real-life usefulness beyond the status, but that hasn’t stopped people from obsessively trekking to locations to maintain and achieve a mayoral status.

Pokémon Go uses a similar concept with “gyms,” often located in distinguishable town landmarks (like a park or fire department). Gyms are battle locations, where at level five, the player can battle and join one of three teams: red, blue or yellow. Users can challenge the leaders of gyms, who are essentially decided by the power of the Pokémon on both sides. When the challenging side lowers the gym’s prestige to 0 by successful attacks, that player can take control of the gym. Like Foursquare mayorships, there’s no tangible reward for this other than virtual accolades, but it doesn’t stop people from playing it for fun.

Foursquare and Pokémon Go prove that businesses don’t need to offer monetary compensation to get people off the couch and into their store. All people need is some sort of accolade or leaderboard system, where either by presence alone or some degree of competition (like Pokémon battles), there is a possibility for one to be enshrined in digital glory — as any leader of a gym in Pokémon Go is.

It wouldn’t be surprising to see businesses align with augmented reality to inspire some sort of loyalty points program, where whenever a user checks into a location with augmented reality (and makes a purchase) they can accumulate points. A grocery store, for instance, could host a very visible leaderboard that shows the most discount-savvy shoppers, by listing which users saved the most on groceries throughout the past week or month. This competitive inspiration could prompt consumers to purchase more, as well as provide a competitive edge over nearby retailers who do not offer this exciting program.

What Businesses Hope to Avoid

The prospective power of augmented reality is clear, though there is already criticism that while premature, it is warranted. This futuristic video shows the potential downside of augmented reality, which is essentially too much clutter, irrelevant ads and incessant bugging to “buy this!” Just imagine the outcry among Pokémon Go fans if ads for Walmart started popping up in game — even though the game is free to play, users feel deceived by irrelevant advertising.

As such, businesses that successfully integrate augmented reality to their platform are best off honing in on their own product, as opposed to seeking monetary opportunities from third-party advertisers. The potential for increased profits from augmented reality in one’s own business is enough. Distracting users with third-party ads within an augmented reality-friendly app designed for a company’s store or site will simply turn them off from your business in general and will void most benefits of augmented reality for business.

Waiting for the Next Big App

Pokémon Go is a fun app that should have plenty of longevity, as the developers will likely improve the gameplay and expand the features as time progresses. Still, it’s very likely we have yet to see the go-to central app for augmented reality — specifically an app that relies more on business-based interaction than catching virtual pocket monsters.

It would not be surprising to see an augmented reality app emerge that partners with local businesses to inspire some sort of competitive couponing. An example would be a local shoe store offering 30% off to the first several people who can run a specific course in a given period of time. The app would pop up something like “Joe’s Shoe Store: Offering 30% off to the first five users who can run from [Point A] to Joe’s Shoe Store in under 10 minutes!”

Augmented reality comes into play as the device tracks the speed and location of the user. This drives people to the store as well as provides advertising. It’s likely an app will emerge that resembles a Groupon-like app, but there will be actual physical movement and competition playing a role in scoring exclusive deals.

Investing in Augmented Reality

Many businesses are taking a wait-and-see approach with augmented reality, as despite the emergence in popular culture, there’s no real clear or safe way for a small business to implement it. At this point, the best course of action would be to hire an app development or team that’s capable of the technology. Businesses that invest in creating their own app with augmented reality features could find it very worthwhile.

In addition to a native business app being able to provide offers like the aforementioned Joe’s Shoe Store example (competition for deals), an app’s ability to inform users of a nearby chain or relevant sale (based on their previous purchasing history) can be pivotal in bringing foot traffic to the store and increasing sales. Additionally, a native app that involves some sort of game-like competition using augmented reality is a great idea that fosters people’s collectivist mentality, evidenced strongly by Pokémon Go gyms and Foursquare mayorships.

The Future of Augmented Reality for Business

The future of augmented reality is slightly murky, considering that the technology’s most popular representation at the moment is a Pokémon game whose business benefits are mostly unintentional. There’s a likelihood, however, that the makers of Pokémon Go will begin working with local businesses for mutual benefit. Pokémon Go benefits from becoming even more immersive, touting that their augmented reality is reflective of reality more than ever. The businesses, in turn for paying, get more foot traffic, thanks to the game makers choosing to drop more Pokémon at the location or establishing a Pokecenter there.

Businesses are also likely to look into visual embellishments with augmented reality in mind. Snapchat has already begun to rise with this feature, with their face-scanning technology, allowing one to significantly alter their appearance. A clever business would incorporate this into their marketing campaign. Geico, for instance, could negotiate with Snapchat to feature their mascot (the Geico gecko) as a face-scanning option. People will have fun turning their face into a lizard, while Geico will benefit from the rather subtle marketing.

Holograms are also likely to play a future role with augmented reality in business, with the often constricted space of small businesses finding benefit in an alternative to signage that takes up very minimal space. Holograms coinciding with augmented reality has been indicated in the market for some time, like when augmented reality startup Daqri acquired a hologram manufacturer.

They and some other businesses want augmented reality to be everywhere, something that will become closer to reality as people become more familiar with hologram technology. As hologram tech becomes commonplace in retail, wearable augmented reality tech is bound to rise.

Customer Retention and Engagement: The Main Benefits

Early forms of immersive augmented reality in the form of fun apps is enough to show us their popular appeal, while also reminding of the collectivist mentality of participants and the lengths they’re willing to go to for digital status, like being a Pokémon Go gym leader or Foursquare mayor. Businesses that recognize the potential of this mentality will do exceedingly well in integrating augmented reality, preferably through a native app, and increasing foot traffic and customer retention as a result.

The primary benefits of augmented reality for business involve getting the attention of leads, bringing them into the store and allowing the business’ products and inventory to shine. A poor business with bad service and pricing isn’t going to be saved by augmented reality. However, businesses with a good product/service and starving for attention should see it as a fantastic marketing opportunity that shows consumers the business is tech-savvy, relevant and fun to visit — even if it’s mostly because of augmented reality.